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Under PMAY, now even millennials can apply for home loans

To encourage the millennials to invest in real estate, the Pradhan Mantri Awas Yojana (urban) Housing for All Mission guidelines have been amended to include any adult earning member irrespective of his marital status as a separate householder who does not own a pucca house.

Earlier, the definition of a beneficiary’s family was limited to a family or a household consisting of husband, wife, unmarried sons and daughters who did not own a pucca (an all-weather dwelling unit) house. Now, even unmarried children of a household are eligible to apply for loans under PMAY.

The move to amend the beneficiary definition to include an adult earning member, irrespective of his marital status, is expected to encourage many millennials to come forward and invest in real estate, say ministry sources.

As per the new amendments, new areas notified by the development authorities will also be eligible for benefits under PMAY. What this means is that first time homebuyers in areas such as Noida and Greater Noida, Lucknow etc can now benefit under this scheme. Only areas under urban local bodies were allowed to benefit from PMAY earlier. The definition of carpet area has also been amended to exclude walls of balconies, verandahs and terraces.

As per the amended PMAY guidelines, in case of a married couple, either of the spouses or both in joint ownership will be eligible for a single house, subject to income eligibility of the household under the scheme as per the amended guidelines.

In his New Year’s eve address, Prime Minister Narendra Modi had announced the PMAY (urban) for middle income group. Under the scheme, the Central government offers an interest subsidy of 4 percent for loans up to Rs 9 lakh for those earning a household income of up to Rs 12 lakh. An interest subsidy of 3 percent is offered for loans up to Rs 12 lakh for families with a household income of Rs 18 lakh. The benefits are anything in the range of Rs 2 lakh to Rs 2.5 lakh. The government has so far disbursed Rs 750 crore to over 40,000 buyers under this scheme.

Millennials Keen on Homes

According to a survey on The Millennials by CBRE Group Inc across 13 countries, as many as 82 percent Indian millennials live with their parents and saving for the future is among their top priorities and a large majority look at real estate as a sound investment opportunity. It points out that by 2020, 65 percent of Indian population will be under the age of 35.

Over 23 percent of Indian millennials currently residing with their parents are likely to move out of their family homes within the next two to five years. As many as 65 percent of them aspire to buy a property in the future without compromising on the quality of life, the report says.

Also, compared to other countries, millennials in India and China displayed the strongest intentions to purchase their own property in the near future with as many as 35 percent Indian millennials citing investment as the key driver to buy a house, the report says.